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US Holiday Sales to Cross $1T for the First Time: 5 Picks

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Retailers are gearing up for the holiday season, starting late November and stretching until early January. Despite rising tariffs, trade tensions and global economic slowdown, a record number of consumers are expected to splurge.

U.S. holiday retail sales are likely to jump 3.8% year over year to $1.008 trillion this year, the first ever trillion-dollar holiday season, per eMarketer. Last year, holiday retail sales grew 2.4%. Cyber Monday, in particular, is expected to be the biggest online shopping day in history, with sales poised to surpass $10 billion. Black Friday and Thanksgiving Day are also anticipated to witness solid sales.

eMarketer added that in-store sales will increase 2.5% to $872.25 billion during the holiday season compared to last year, while e-commerce sales will climb 13.2% to $135.35 billion. eMarketer principal analyst Andrew Lipsman added that “with fast shipping at a premium during the compressed holiday season, retailers like Amazon have an advantage for online deliveries, while those with advanced click-and-collect operations like Walmart, Target and Best Buy will also get a leg up on the competition.”

The National Retail Federation (NRF), in the meanwhile, has issued an encouraging picture. According to the NRF, holiday retail sales — excluding restaurants, automobile dealers and gasoline stations — are projected to rise 3.8% to 4.2% year over year to a total of $727.9 billion to $730.7 billion.

What’s more, the NRF anticipates online sales growth between 11% and 14% to a total of $162.6-$166.9 billion, up from $146.5 billion reported during the same period last year.

Last but not the least, per Deloitte’s annual holiday retail forecast, holiday sales are expected to increase between 4.5% and 5% this year. Deloitte further forecasts that e-commerce sales during the holiday season will jump 14-18% on a year-over-year basis.

But why are retail sales expected to rise during the holiday season? This is because the economy is still growing albeit at a slower rate and labor market remains healthy. Additionally, consumer confidence remains high, which should boost holiday spending.

Taking the bullish holiday sales trend into account, from retail behemoths to e-commerce giants, all are poised to make a strong year-end rally. But there are five retailers in particular that investors should place their bets on. Take a look —

Shoe Carnival, Inc. (SCVL - Free Report) operates as a family footwear retailer in the United States. The company currently has a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its current-year earnings has climbed 3.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.6%, way higher than the Retail - Apparel and Shoes industry’s projected rise of 0.6%.

Burlington Stores, Inc. (BURL - Free Report) operates as a retailer of branded apparel products in the United States. The company currently has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has risen 0.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.3%, higher than the Retail - Discount Stores industry’s estimated rise of 9.7%.

RH (RH - Free Report) operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, décor, outdoor and garden, tableware, and child and teen furnishings. RH currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 0.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 26.9%, higher than the Retail - Home Furnishings industry’s projected increase of 3.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target Corporation (TGT - Free Report) operates as a general merchandise retailer in the United States. Target currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has risen 3.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 18%, higher than the Retail - Discount Stores industry’s expected growth of 9.7%.

Boot Barn Holdings, Inc. (BOOT - Free Report) , a lifestyle retail chain, operates specialty retail stores in the United States. The company currently sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 6.7% north over the past 60 days. The company’s expected earnings growth rate for the current year is 30.4%, higher than the Retail - Apparel and Shoes industry’s estimated rise of 0.6%.

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